Here's What Howard Bancorp, Inc.'s (NASDAQ:HBMD) Shareholder Ownership Structure Looks Like

By
Simply Wall St
Published
April 30, 2021
NasdaqCM:HBMD

If you want to know who really controls Howard Bancorp, Inc. (NASDAQ:HBMD), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Howard Bancorp is a smaller company with a market capitalization of US$319m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Howard Bancorp.

Check out our latest analysis for Howard Bancorp

ownership-breakdown
NasdaqCM:HBMD Ownership Breakdown April 30th 2021

What Does The Institutional Ownership Tell Us About Howard Bancorp?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Howard Bancorp already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Howard Bancorp's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqCM:HBMD Earnings and Revenue Growth April 30th 2021

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Howard Bancorp is not owned by hedge funds. The company's largest shareholder is T. Rowe Price Group, Inc., with ownership of 13%. Patriot Financial Partners, L.P. is the second largest shareholder owning 12% of common stock, and Priam Capital holds about 7.2% of the company stock. Furthermore, CEO Mary Scully is the owner of 0.8% of the company's shares.

We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Howard Bancorp

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Howard Bancorp, Inc.. In their own names, insiders own US$19m worth of stock in the US$319m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 20% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 19% stake in Howard Bancorp. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Howard Bancorp you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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